>> a discussion about the defense department's budget cuts and their impact on military readiness and strategy. former nsa or and officials from the energy industry talk about ways to reject the nation's electric grid from cyber attacks. handsome young officers that were surrounding my grandmother. my grandfather had been trying to talk to her because of the handsome young men. rush to go upstairs to do it they had to do. they left her standing there. grandfather fell in behind her going up to the steps to the deck. when she heard that, my

grandmother fainted. right back into the arms of the president. he caught her tenderly and gently. >> the encore presentation of first ladies, looking at the public and private lives of our nations first ladies. next week, anna harrison to eliza johnson. >> c-span, we bring public affairs events from washington directly to you, putting you in the room at congressional hearings on the white house events, briefings, and conferences and offering complete coverage of the u.s. house, all as a public service of private industry. industryy the cable tv 34 years ago and funded by your local cable or satellite providers. you can watch us in hd. >> a look at the defense department's budget cuts under sequestration and the impact of

those cuts on military readiness and strategy. the pentagon will have to cut $500 billion over the next decade. the discussion was hosted by the brookings institution. >> good morning. called dissecting the pentagon strategic choices and management review. i am marvin calvin. i am a senior advisor to the center for crisis reporting which is located just next door. way back in august 2011 which is only two years ago congress passed and the president signed into law a legislative monstrosity called the budget

control act. it was a way of doing something when nothing seemed worse. at least at that time. a joint committee was set up to control the spiraling deficit. congress warned that if they fail to come up with a solution sequestration would automatically although. these cuts have now begun. the pentagon was already prepared to cut 150 billion dollars over the next 10 years. sequestration would require $500 billion in cuts over the next 10 years. last week check hagel warned that cut of that magnitude would not only affect entitlement such as salary, housing, education and the like but it would since readiness and capability. if the u.s. had been ready it is

necessary to fight two wars at the same time with these cuts. that would no longer seem to be possible. what to do? we have asked highly effective budgetary experts to explain reality and options to us. they are a resident fellow at the american enterprise institute's and if i got this right, during the last presidential campaign she helped governor romney.

recently our panelist turned out an ope-ed "urging congress to reverse sequestration.? why don't we start with you? then we will go on to mike and i will ask you a question and we will finish at 11:30. >> thank you for moderating. it is a pleasure to be here. that's only do we recently author the op-ed in the wall street journal about some of these issues, we met with secretary hagel at a meeting last week. we talked about some of what was

discussed during that conversation. i think you have set the ground very well. sequesters not the starting point. so much in washington feels like we are always starting at square one. this is the fourth year of budget cuts. the job done has been well under way. there were a series of capabilities ever since. they are constantly banging the drum. that is why you hear them talk endlessly about how damaging sequestration is. this is not the first dollar of defense cuts nor is it the first capability or capacity that is being unwound. a lot of the things we will talk about our overdue.

so many of the choices that the pentagon had recently laid out, i think that should have been under consideration for years ago. not to say that a lot of the defense cuts were not of value or utility. this is not their first efficiency journal. there were a lot of things done rightly and wrongly. i'm not sure the lessons learned have plugged in. what we have now is the defense department and congress that continues to have to go back to the same money and priorities for dod every year. we're doing this on an annual basis. we are doing it piecemeal.

it is chipping away at the cuts as opposed to big richer strategic planning, thinking about this. we really do have to live with this. how do we handle this for 10 years? we see what we saw in 2013. we're going to start to talk about serious change in planning. >> pick it up. by the way, mackenzie cannot be lamed by governor romney's loss. she has been polite enough to not remind us that she is from georgia. this has been very well framed. some of the additional budget cuts that are now being considered i think are ok. we do not have the exact same view. i do not want to suggest that

everything i say she would endorse. we think there are room for efficiencies. some of them are that you can accomplish then. they are worth doing. in the briefing that we heard last week from secretary hagel and his team, which develop some of the ideas that were also expressed by deputy secretary carter. we saw an estimate that perhaps $40 billion could be saved over 10 years for new efficiencies. that is on top of the other

efficiencies that were already identified as part of other budget cuts reviews. it is worth pointing out, and congress is not yet authorized many of those previous efficiency. we are even deeper in the hole than we thought. we are not going to have to persuade congress to change their minds or find other ways to save comparable amount of money. let's say these are authorized. some of these efficiencies could save somewhere around $40 billion over 10 years. every time he asked the pentagon to try harder and go deeper they will probably find another 5 billion or 10 billion there. on balance there's never going to be the end of all cuts. 40 billion. let's say we can do that. then there is another examination of possible savings which we wrote about in this wall street journal op-ed 10

days ago. they have to do with things like reductions in certain elements of military compensation or reductions. these are not easy. they are not inherently desirable. [cell phone ringing] the idea that we should cut the compensation is not proper phrasing. we would like to make sure that every possible benefit that can be proposed that the received. certainly wounded warriors. certainly the families of deployed soldiers. certainly troops trying to get a g.i. bill so they can transition. all these people deserve compensation that is not hindered or compromise. an example would be the prevalence of commissaries. they have plenty of walmarts and others. they are not trivially easy.

they are cutting back on the compensation or at least the rate of growth of compensation for our volunteer force that has done so much on behalf of all the rest of us over the last 12 years and before. you add up all of those savings, which are more or less along the lines of what i would agree with an similar to the ideas that we had in our op ed, that is another $85 billion in savings. if you add those, we are up to about $105 billion in additional 10-year savings. the good news it is almost the amount the president is

proposing to save over his tenure latest budget plan. we do not have to make a lot of cuts into military muscle. there is room for some cutting. in my recent book, i wound up advocating about $200 billion in 10 year savings. i was prepared to recommend certain specific weapons programs. we all are going to have different takes on what the right number of army divisions over grades or joint fighters we should purchase. my take was that in addition to this hundred and 20 or so maybe another 75 or $100 billion from cutting muscle. the pentagon seems to have arrived in a different place, in a similar place. then i had to keep going. this is not a criticism. this recent review, or skimmer it is called, by people who do not like having again from the pentagon budget. the idea here is that we're

going to have to look for ways to save this 500 billion dollars. sequestration is currently the law of the land. above and beyond the kinds of changes i have artie mentioned, then some modest tweaks to capability. they did a couple of things i really do not like. i'm not sure the authors like it either. one of them is to downsize the u.s. army quite a bit more than is already being planned. and the way for other discussion topics. let me give you a sense of what is being considered. the u.s. army right now is just over half a million active-duty soldiers. it has grown up to about 560,000 during the peak of the iraq and afghanistan wars. we also mobilize a national

guardsman. all of these numbers are quite modest compared to the 1980s, the cold war. they had 800,000 were says. we have had a much larger u.s. army totals during korea, vietnam, world war ii. being down was a girl from the clinton years and from secretary rumsfeld's early thinking. it was not huge. it did not reverse because of the end of the cold war. now we are planning to go down to basically where they had been. the skimmer is envisioning reductions of maybe 420,000 are perhaps even lower. i think this is a bad idea. the only problem i have with the

administration as they want. we do not want to do these counterinsurgency missions. this is the largest sentiment we had after vietnam for sentimental reasons. that sentiment when taken to excess leads you unprepared. you might have to do a counterinsurgency whether you like it or not. there is the old saying that you may not have interest in war but it may have an interest in you. we may not have an interest anymore and counterinsurgency but what happens when not just syria stays mired but it begs even lebanon and jordan. what happened when the only potential way out may see a trustee. i could go on with hypothetical examples.

they are going to sound a little crazy. they are going to as crazy in 2000 if i had mentioned afghanistan as the source of the 9/11 attack. you cannot always anticipate where war has sprung up. we have a lot more to discuss. the kind of cuts to the u.s. army at least being considered within the skimmer process i think are highly imprudent and leave us catching on to the latest fad in warfare. let's just pretend that we can decide in washington that we will never do it can. we made that kind of mistake before as a country. >> thank you very much. let me ask all of you a quick question. do you think by the end of this year congress will have acted on

sequestration specifically for the military? >> they would have acted separately in each chamber. there will not be any change to the law. >> we can realistically look forward to the implementation of sequestration. >> i fear she may be right. if you look at the 2014 budget, the cuts that would be required by sequestration are so harsh for that year and there is no way to facing realistically, it is even a worse debacle then sequestration over the 10-year horizon. it dwarfs even what we going through this summer. if compounds what we are going through this summer when almost half the airports and we are not fixing the stuff we need to i think congress may ultimately save $52 billion need to be softened. they do not do anything that is fundamentally changing the basic logic of sequestration. this is possible just because

the specter of sequestration next year so horrible for the armed forces. >> if that be the case, we're working with the reality of very massive cuts. you have given us a hint about the practical effect. the military exist to fulfill the desires and the strategic aims of the country. as i mentioned earlier, we have lived in this country for a long time with the belief that we will fight two wars at the same time. i assume he meat iraq and afghanistan. that did not take into account that there could be an outbreak of hostility in korea which would involve the united states momentarily.

if we look at the strategy now t of money that is going to be available to be spent, what do you think will be the of that on the strategy itself? what would you recommend to the president? what would you recommend that he begin to consider as a change in the strategic aims of the u.s. to conform to the economic reality? >> i would not want to advocate that. they are already disappointed that they have officially moved on from the outstanding contract. i am already disappointed that they have officially moved on from the outstanding contract.

our planning are formally changing quietly to move away from the two war simultaneous capability. >> where are we going now? >> the department is sticking by its guidance. they have the guidance last january. because the rebound to asia. it is basically an increasing emphasis on asia and to hold this in the middle east. it is at the expense of capability in other regions of the world. the military is shrinking. we do not have a choice. we do not have a single ship in southern command. you cannot say it is not eurozone. it is a relatively sound strategy. the independent panel called for a similar -- qdr independent panel in 2010 which was a stress test for obama's first defense strategy.

some argue the bush administration started this. it is not zero-sum. i do not see any scenario where the congress could continue. what you are saying is that economically we will not be able to do that? >> their artie moving away from that in realistic time. the previous position is to not

break the strategy. we also heard this reiterated at the pentagon last week. the reviews were to move it as is. a quarter trillion in defense of budget cuts proposal by senator patty murray, larger than the president in his latest budget process. that would have been the strategy. the full sequester would have stopped it. based on the double and triple whammy hold, we are not just talking sequester dollars anymore. we are talking about readiness holes that is also its own tab. it is under which a talk about later. all of this combined me that any scenario is that a minimum bending strategy. i think it is a sound one.

i do not know how you can keep it. >> you have written that you go from two wars at the same time concept to one war plus two. i assume you mean smaller engagements. could you spell that out for us? >> i think it is good you are focusing on the strategic choices as we think about different levels. otherwise it seems like just moving around. there is room for debate even within the budget. it is not as if all wars came in the same cookie-cutter shape. the basic logic is that we thought we would have to fight iraq and north korea at the same time. it turned out to be iraq and afghanistan. you can debate whether you had to do both but we did do both. our military was too small. we were a little bit off in our calculations. that is why secretary gates ultimately had to increase the

size of the army and marine corps. in the 2010 defense review, they solved it to have it be definitive immediately. this is a 20 year old, if not more. whether there is room for the second one to be a little more gradual and a little less definitive. in 2010 president obama started to move a little bit away from that robust rhetorical emphasis. saddam hussein was gone. even though iraq is still very turbulent it is much more likely to be in overland invasion fed to it measures. iran is still there. it is also relatively unlikely to be an invasion threat. it could eat a lot of other threats

to the invasion. that was 2010. in 2012 this guidance we are referring to, the january guidance softened a little further and talked about the second war not needing to be thought of as an all out war at all. there is still the notion that you may have to punish an aggressor. there is some semantics here. >> it is like playing with reality. >> a little bit. i would support the logic to that point. we did have to shift more of our focus towards our war with china and also toward iran. these are both unlikely to be classic big land wars. they could be more maritime or a tear, cyber, special oriented complex.

separating this i think was ok. now what we are seeing with the sequestration specter is the possibility of going down to something like one war and nothing else. maybe you can still do korea, maybe. this is often not how the world works. we all know that our good friend mark just let things to try to negotiate this. in the unlikely event that he succeeds that could be an international implementation force backstopped by american troops to make that successful. they hit one of our embassies in one place and then we call a truce and then we go back to normal. that is pretty optimistic. there are a number of scenarios.

that is why i talk about one plus two. you should be able to do one all out war and to simultaneous smaller missions. hopefully they are multilateral. they could be long-lasting. that is where i come up with an army that should be around 420. >> what is the part of the world that the united states military must be focused on more than any other?

>> in this moment it is the middle east. strategically, the defense department has to do both. they have to think about the world as it is in this very moment and reality. what is happening? and conflict breaking out in crises everywhere. then think of buying 10 or 20 years. they need to do both. >> presumably they are. >> they are. if you look at the example the budget request from last year, the immediate concern is the middle east. i think that is exactly right. >> that means what? break that down. mike spoke about iran. one could think about syria. want to think about the huge problem in egypt. there is everything going on in north africa. what the middle east mean to us now? >> what it means to us is probably debatable.

>> you military experts. >> let me say quickly for dod right now it is iran. looking at the capabilities that might be required to deter conflict breaking out or miscalculating in international waters or prevailing in some type of military efforts, whether we are supporting someone else are undertaking our own. there are many other things happening. they went to a special forces and counterterrorism missions. that is certainly not what we are limited to. there is ongoing planning. i do not know, that is an example. >> i'm trying to get at this. i have a feeling we are talking theory, not necessarily reality.

think about it. you have both spoken of iran. if the united states in the next year or three decide that and must take on iran and the nuclear program and korea the route, it is not a matter of a small operation. korea is big-time. we arty have troops in south korea. the idea of one plus two, the idea of whittling down two, sounds to me as if it is not related to reality. united states has to be in a position whether it is 1 plus two of taking on any combination of military challenges. can the united states do that realistically and might of what is happening in the american economy? in light of what is happening in american politics. in light of the fact of sequestration.

we are having strategy being determined by people up on the hill who may not have a clue as to what strategy is all about. is that right? >> i am glad you are framing these very starkly. it is our national security after all. we have to get away from a theoretical discussion. i threw around numbers. if you ask me why we have to be able to do to smaller missions at the same time, i would say typically because that is the area we are doing. the expectation is that we will keep 10 or 15,000 u.s. troops there for a number of years. middle east peace is president obama possible. i do not know what kind of force may stop it. probably one or two brigades. the probability of war against iran is probably in the 30% range. hopefully not 50%.

if we do wind up in that kind of a strike we should remember we do not always get to decide when wars and. you may get to decide when you start them. you usually do not get to decide when they are over. having to show up on the persian area is a pretty plausible notion. when he thinks are the smaller missions we are likely to do two and maybe three at a time. i am not even talked about my preference which will be or an ultimate bosnia style solution in syria where the u.s. deployed them there as part of an ultimate peace deal and probably not within reach this year. if anything i've understated the requirements.

450,000 troops in the active- duty u.s. army i think is small. it is not throwing him teen piles of cash at an already bloated pentagon. >> mike talked about the army and it affect. what about the navy and the air force? can you give us some sense what if these cuts take place will happen to the u.s. navy in the u.s. air force? >> sure. the consequences are pretty stark for both of these services. of course in the marine corps as well. it was framed to us as part of the pentagon presentation that this is one of our forces globally. they are out there ready to respond. that is leaving out the air force that has just evacuated personnel last night from u.s. citizens from yemen and other places.

the marine corps does have that significant role. we taught navy cut i will include them as well. it is pretty consequential. let me start with the air force. the air force is the second biggest loser under the budget debate and not strategic. it is clearly outlined for the budget. this is not strategic driven. we can say that upfront. i do do not think anyone disputes it anymore. the army is getting a lot of attention and rightly so. michael is so eloquent and talking about why that is a problem.

the security of defense outlined that he is going to change the so-called golden ratio of the service budget shares, the historical amounts. the implication there was that the navy is the relative winner but no one is the winner because everyone is coming down. the army is the most significant and heavy but the air force is a close second. in this briefing it is on tactical fighting forces and on some lift forces. there is certainly more that was not mentioned as part of the briefing that requires a significant chunk of our forces. these are old and it should be considered anyway. when you need numbers, and you really do need them, that could become a really worrisome outcome. if you consider your air force, your swing for us, global force, which i do this is disconcerting.

these are the kinds of things you will give up. the air capabilities, the secretary talked about these groups. all of the associated shifts -- >> two or three cut down from where we are now? >> correct. technically it is an 11 carrier force with a waiver of one. >> we have come down to eight is the sequestration went through. >> that is the prediction. >> tell me in a practical way how that may end up hurting the united states. >> these are global lily pads we can take anywhere that is water.

we can use it to use whatever we need to do. primarily they are a deterrent force. they are a fourth multiplier. the navy does not have a choice. cannot recall who mentioned it. if you look at the u.s. navy budget and composition, 60 of the navy touches something that has to do with the aircraft carrier. that is what goes into it, the ships that say with it, etc. you can see the damage that would be done to our world wide forces. i reference the marine corps. we would be giving up a lot. we saw this partly in iraq. the inability for us to negotiate in any sort of military service for the long term would have ambushed with a

lot of intelligence. in the region we would have had naval support as well. we gave it up to iran as part of the deal. >> help us out a bit. would you like to add to what she is already given us? >> great points. they're looking to do things differently. there's only so far this can possibly go. i will look at why the cuts that she alluded to would be too extreme.

last spring a sequestration was about to hit. they decided not to send a second carrier to the gulf. a lot was made of that. for the sailors who were about to go, it is unfortunate they were asked to jen up and then stand down. i do not worry that much about what it did for the country. i do not think it was that important to have two carriers to the gulf all the time. if we end up fighting iran a could be. an idea that i am trying to promote is since we have this rising threat of iran in the broader middle east and a lot of other countries agree with us that it is a threat, i think we can be a little less skittish about putting combat aircraft on land in the middle east. historically we have not wanted to associate ourselves with the autocracies of the gulf cooperation council and the

arabian peninsula. they have not always wanted to associate themselves. we did not like it when our airbases got attacked. we agreed after the invasion in particular just to scale back. we still have some airbases in the region. cuts are elsewhere. we did not have a lot of combat aircraft. we could change that. we can get them to host 50 fighter debt each. that way you do not put any eggs all in one basket. if you do that you do not need light as many carriers. the carriers need to be cycled in and out. you wind up needing five in the forest uses saying one. it is a great way to have combat airpower if you do not know where you're going to have to operate and you need flexibility. that is an example of where i would be able to see this in one ship.

maybe even two. on the other hand, china is adding $10 billion a year to its military budget each and every year. i do not expect us to fight china. i do think we have to sustain a very robust presence. i would like to see us be able to ramp up our carrier presence in the pacific. that has been a focus of secretary panetta and secretary hegel, the rebalancing to where the asia pacific. we are trying put 60% in the pacific.

he used to be more like 50%. you not going to achieve the desired effect. i think the navy can shrink a little. even if you put these kind of ideas on the table and you are breaking a lot of china to do what i said, this is how you get to maybe $200 billion in additional 10 year savings. sequestration to me as just a bridge too far. >> i think i'm asking this as much for myself as everyone in the room. you are giving us a little bit of the flavor it is to figure these things out now. in a realistic way, the united states is hurting economically. you have to cut the budget. you have to cut the pentagon budget. there are two questions that come to mind. one is what about the rest of the american budget, not just the military side? we seem to be a sort more with the military side of the budget and complaining about cut their family are about the rest of the budget. i appreciate military needs and

all of that. is there somebody in your experience at the military side who was saying we are only part of this problem and we have to be aware of everything else in american society that is going to be affected by sequestration? do you even hear the in your discussions? >> i have heard it from the secretary and the last secretary of defense a lot. even the predecessor talked about security efforts beyond dod. there is a great concern at a political level about this. to be fair, reason so much is on this and particular is there has been these efforts. they are putting in more dollars relative to its own size than it is the largest.

it is only fair and my mind and certainly as unique and turned its constitutional mandate. it is not that unique but it is reasonable to have an emphasis on the defense department in particular. this is the fourth year of budget cuts. almost all of these agencies are coming off a budget wave of good news. we have the stimulus bill and the first year of this administration. that was a plus of every agency

defense. that is when the budget started going down. i will defend this for a moment. >> i am not seeking to criticize the pentagon. i'm trying to put it into a context involving the entire budget and all of the needs of the united states, not just the military needs. if you turn it around and say that we live in an extremely turbulent world and maybe we would like, after afghanistan and iraq, to pull back. and do nationbuilding at home. are we capable of doing nationbuilding at home in a world that remains as turbulent as it is? >> i am going to cite the opportunity i had recently to write and op-ed with david petraeus. one was this week and one was earlier this year in the washington post. we have tried to argue that these deficit deals that have been proposed would be wonderful to have an many ways. they are not essential.

what you need to do, given that america's economy has so much promise, what you need to do is tip the curve on how we are increasing the debt. if we lower our expectations a little we can wind up in a reasonable place for the next five or 10 years. long-term entitlement is a big challenge. our colleagues have written eloquently about this. in the short term, if you had a modest increase in either income tax rates or a modest cap on deductions the way mitt romney was proposing last year and you had a couple percent change in the cost-of-living adjustment for social security for social security recipients that would accumulate over time, you could achieve half the cuts in the discretionary accounts that sequestration would impose.

if you do that, you have prevented the debt from getting bigger relative to the size of the economy. then all the things we have going for us, our energy resolution, the advanced manufacturing, the gradual recovery of the real estate markets. all of these things can kick in. washington does not need to see itself as a location of this great showdown of loaded government versus liberty and the tea party. we do not have to be quite that melodramatic about our role in washington. it is an important role. the private economy and american people will do a lot of the heavy lift and based on forces that are already out there if we can just get the darn debt to start growing relative to the size of the economy. you can actually live with deficits in the range of $300 billion a year or $400 billion a year. we sometimes make the problem seems so impossibly hard.

it is not impossibly hard. with reforms well within these we can tip the deck curve to the point where relative to the size of the economy it is no longer growing, it may be shrinking a little, and let these other positive rings happening take over. >> i have no objection. let's turn to you all. if you have questions, please raise your hand. ask your question. please, no speeches. i see a number of people in uniform. i will try to get to them as well. >> they added a second that deputy of stay. they have a small cabinet department.

secretary hagel has spoken of an enforcer to help make sure the efficiency cuts and other things are done. would it make sense for the defense department to establish the second deputy to establish the resources? >> you have a smile on your face. do you have an answer? >> thank you. a couple of problems. yes and no. i am always loath to grow bureaucracy and add new positions without them taking away somewhere else or figuring out a way at the defense department, specifically this appointment class. the department of defense has made recent changes to bring in a management officer. my colleagues and other things have faced off on that question.

he makes an eloquent case that there have been times where we have had two deputies and works very well. i would argue if you are current, as ndhe way to cruise is a of the man and job, but like a criticism of the man in job, but if he can be executed from his office maybe we can expand this elsewhere. what we have seen before now in the last decade plus, and i'm talking about one of my colleagues. we have seen a lot of policy heavy and this is with people with backgrounds. i do not like that. that is what i do not like. i would prefer somebody who is coming in from the outside,

someone who has been in the industry or run a business successfully or who has overseen management. they have had this model for the defense department in the past. this model has proven that it works. i am not knocking the guys who are in a job. perhaps this was the right way to do it. where we are right now is we need a strong deputy. that is more important than the secretary of defense portion right now. >> the idea of this market being a bloated leas, all kind of dough is being spent unnecessarily. do you think that would actually help? >> i think i come down where mckenzie does. the position is supposed to do this. i think ash carter is doing a good part. there is no clear budget ahead.

it is not doing as good of a job as past congresses. this congress has been unwilling to do it. it is time to ask congress to step up its. >> thank you. >> my question is virtually sequestration has become the law of the land. across the board there are multiple hires right now. in yemen americans have been asked to rate by air live.

the usa is the world leader. it has the cutting edge technology. >> what do you think? >> without defining the foreign- policy, in the case of al qaeda, are we making more friends or enemies? what are we not doing? >> you are raising a very good question.

to me it is a fundamental question. the military is there to implement a policy. mike was alluding to this a moment ago. i think he was being too diplomatic. it is not just a matter of the people who put the budget together. it is the people who run the government and have to run the strategy. they have to perform really money. in many ways it has. now it is operating in a world with uncertainty. you have a conflict that is obvious and not easily resolved. >> the power searcher is often this debate. defense policy is the child of a parent call foreign-policy. that is how it is opposed to work and it has not worked that

way at all. we see this coalescing of the debates. what we're really talking about that are foreign-policy issues. we are now having a meaningful debate. it is being done so poorly and inefficiently. >> from the back. yes, please, right here. thank you very much. >> it is important to note that skimmer is not something the administration necessarily wanted to do. it is a cumulative effect that is having a real impact. it is sequestration that is the problem now. if you look at structure levels below 450,000 for the army or a cut to the navy flow, it is not something the administration is

interested in doing. when secretary hagel made his presentation the other day, he had this interesting strategic choice between capacity and capability. i would like you to talk about that a little bit. capacity is about structure. capability is about modernization and at the edge. obviously, you're not going to choose one path or the other. given the strategy, could you look at capability and that choice and tell us? thank you very much for that question. the administration is not enthusiastic about these additional cuts. the place where i was having a

slight difference with them was almost more tone. they suggested that cutting the army down to the low 400s would follow the logic of the defense strategic guidance from last year. i do want to challenge that guidance. i think the notion that we can conclude this to be over is a little bit of a historical way it thinking about war. with the issue modernization and capacity versus capability, there are so many different angles to take. let me take our joint strike fighter. i am a fan of the joint strike fighter. it has had trouble. it is doing better. i am a fan. i am not sure we need 2500. it is sized largely to replace structure. not quite the more or less.

i think it should be set more. there are certain places in the world. we flew them over a rock for a dozen of years army did not have any problems with aircraft getting shot down. there's always an extra margin of the. is it worth $100 billion to the country? what i have tried to lay out in my own writing and why i reasonable room exist is scaling back the joint strike fighter to something that in my eyes would be roughly half the size. that would be toward high-end efficiency. possibly some strikes against iran or north korea. otherwise your air force structure to the extent you need to keep most of it with a greater combination of existing fourth-generation planes.

or you refurbish the ones you got. you may be leaning to unmanned systems. if you do that you do not save cap the budget. you still wind up with far and away the best combat force that the world will see for the next- generation. aat is the way to strike balance. when you start doing cuts you wind up with this kind of a choice. either zero or an army of less than 400,000. obviously, there are other ways you could do it, too. i do not think we should live with either of those choices. we have to look to rethink.

my question is across the there are so many right now, 19 countries. in yemen, americans have been asked to be airlifted.

there are other options. you can take more out of readiness. it is an expensive proposition. it is not just that it is expensive. it is enveloped the state of being. the chairman of the joint chiefs says this is the most ready military in modern history. here is a debate that can be had, capacity, capability, readiness. there are other options that are not being discussed. itis a foregone conclusion is an illusion of choice. smaller our modern are

bigger or older. it is going to actually be -- the numbers we are watching multiple times, sequester, the readiness hole, and efficiency is never realized. they are going to take from both and they already have been. the notion that modernization among the capability portfolio will be a disproportionate thing when it already has been in the last four years of defense budget cuts. these are already happening. these will just accelerate the choices. that is unfortunate. >> i love your phrase about the illusion of choice, and i recommend that be the title of your book. on this side here, yes, please,

right in the middle. >> arms control association. i think in washington it is easy to get a consistent that sequestration is a disaster, a terrible way to cut budgets, a terrible planning mechanism. if you could imagine yourself at a town hall meeting this month with a member of congress, i wonder how you would explain to the crowd there who is responsible for sequestration. why can't we just end this? what do you think an honest answer that question would be? >> thank you for that question. >> i am happy to start. i think that the genesis of the idea -- we have all read our "washington post" accounts, and i hope it continues to do its excellent journalism. there and elsewhere, who first talks about the idea two years ago, jack lew or somebody else. i would not criticize anybody because at the time it was pointed out that at the time it seems better than doing nothing and now we have our doubts. yeah, it is now worse than

nothing in terms of how it is affecting, not only defense, but other discretionary like you're allowed to cause. they are seed for the future -- science, education. i care about these ideas from a national security point of view just as much as i care about the defense budget. they are being hit by sequestration, entitlements, and tax reform are getting a free ride. that is exactly the wrong way to go. i would say sequestration is worse than nothing. having said that, why have we not been able to move beyond it in the last year or so? that is the other part of the question, because the origins of that arm will shared origins. here if i had to allocate land, i would sort of say 65% to the tea party wing of the republican party, a 35% to the staunch defense of entitlements wing of the democratic party. -- only reason why i give

there's plenty of blame to go around. 35% of blame for democrats is not meant to be a pass or a soft critique. maybe i could be talked into 60%-40%. president obama's budget request this past spring was plausible, looking for compromise. and he is the top policymaker in his party. where i would criticize the president is he does not like to talk about it very much. he is not trying to rally a spirit of shared sacrifice around the country the way some of my heroes, paul tsongas, warren rudman, and bob dole and bill clinton, some of the people from the 1980's and 1990's who were willing to talk about the reforms they did not like in order to try to create spirit of national solidarity. there has not been anybody doing

that very well, including the president, although his budget itself is better than what it was or better than the tea party budget it, in my judgment. the president has moved to a good intellectual place. his budget is a perfectly reasonable compromise between the different points of view. he has not done enough to sell it. and the tea party has treated any kind of tax reform as if it is likely to be the end of our economic growth, failing to recognize that historically tax rates now are lower than they were under reagan and clinton, and failing to recognize that entitlement growth is something that we are all collectively responsible for. mitch daniels and others have said that. i give them credit. the tea party has talked about the growth in entitlements like it is a runaway train. over the next years, it is.

in the short term, i do not think we need to break medicare and medicaid in order to make progress. we can scale back the rate of cost increase in social security, for example. that is a more palatable near- term mechanism, what we continue to have the big debates about longer-term reform. i'm getting a little bit off my defense specialization, so let's say there is plenty of blame to go around. i will finish on that note. >> i wonder if i could pick that up. i do not want to leave that die. mike said a moment ago that the president is ready to compromise, and mike has written about with david petraeus recently. this idea of the advantage of compromise, the need for compromise, and i think mike is absolutely right in saying that the president has demonstrated in a number of ways a desire to reach out and a desire to compromise. the tea party has not done that. and that is a fact. and i think that we lose the

spirit of the madness of washington politics right now if we forget that one side of the argument is not wishing to compromise and the other side appears to want to compromise, and you cannot get a deal in this city ever in more than 200 years unless the two major factors have come together and agreed to do some kind of compromise. my editorial is at an end. next question. yes, sir, right there. >> thank you very much. my question is talk about how the various cuts in the defense would affect perceptions of our military power both in allies and other countries. thank you. wasust this morning i reading deputy secretary carter's remarks to that effect, which sounds qualified,

and he was reflecting reality. everybody is watching and taking notice. the times -- you get the sense in washington that everyone that the people making the decisions here in this town. what he is referring to is friends and foe are potential foe alike. our allies are worried that we have got a cut-and-run planned, that we are putting on a happy face or lipstick on a pig. they see the numbers shrinking or our presence shrinking or the capability shrinking, but they hear everything will be fine, pivoting resources, all is well, and they intuitively are sensing things are different. and those who would seek to capitalize on a moment of perceived weakness, i guess you could say they are also watching, and i would argue

calculating differently about the timing of accelerated nuclear progress in their programs or any other kind of challenge from terrors like assad. your question summarizes the answer to me, that, yes, everybody is watching. >> let me give you an example of what we have been trying to do, and we have referred to it as that rebalancing towards the asia-pacific. as you know very well, jeffrey, that rebalancing is a multifaceted strategy. it was well handled by people like hillary clinton in the first obama term. the president himself deserves primary credit.

it was relatively notable for its modest steps. there is not too much huge change in the rebalancing. that is a good thing because we want to remind the region and china that we are still an asia-pacific power without leaving confrontational or giving the impression of a containment strategy in the making. i agree with what it amounted to. if you actually cost out the changes, the changes, the reapportionment of defense resources towards the asia- pacific, i did a back-of-the- envelope, and it is a $10 billion or a $12 billion effect in terms of the budget your spending elsewhere, spending in the asia pacific, roughly speaking. abouts a way to think this question you are making. we can try to protect that $10 billion increase to the asia- pacific, but it is hard to do so when it accounts for much of your global defense spending. the overall numbers are coming down, and you will try to claim that your efforts have been increased relative to what it was before. the math does not add up. $10 billion that you're tried to protect while you are losing

$50 billion out of the overall defense budget. rebalancing to the extent that i support it, to the extent that i think many in washington of both parties have supported it as a carefully calibrated and appropriate way of reasserting our interest in the broader asia-pacific theater is now being directly challenged if not undercut by sequestration. in the short-term, there's no big deal. in the short-term, the pilots can take the summer off, we are mistreating our civilians, and i am frankly a little upset about how we are treating our civilians with these furloughs, but from an asia-pacific point of view, , i'm not sure adversaries or neutrals scare that much. we are putting a few more weapons in lines waiting to get repaired down the road. we are not cutting the grass on bases.

you can try to talk your way of the sequestration and say the effects are temporary or modest or will be repaired next year. if you sequester again in 2014, i do not know how you sustain the argument. we have to admit sequester will have trumped and essentially undone the rebalance. >> thank you, mike. yes, please, right here. thank you, sir. >> national defense university. a little bit of my question, so i will push mackenzie on the illusion of choice. some of our colleagues at another institution, less prestigious than the two represented here today, say there is a strategic choice, a real strategic choice about the temporal dimension and the risk we are currently facing. which is a pushback on marvin. war's frequency and cost is specifically perceived by some people as being much less today empirically. do we have less risk today that

we should be smart about and invest in modernization for the future? is the industrial base fragile and weak and is it at risk and should we invest in modernization? at another question, what be investing in because there is an idea that we know what we are investing in, what kind of wars we want to fight. mike wants more adaptability and the defense should provide guidance. is that what should be doing, present tense, readiness, modernization in the future? >> illusion of choice. >> frank is so eloquent. going back to the war game where we conducted the shadows choices in management review, and you should be familiar in think tanks, i will speak to them because we have recited each other's pitch by now.

there is some great points that came out of that, and one is that it is debatable. that is what i was saying, that the defense department is setting up a varied choice capability when there are many other options that could be considered. one is duly cut readiness. how much, across what components come across the services, how would you execute it, and what impact would it have on war plans? i think that needs to be open and up for discussion, because it depends on what you want to do. if the focus is in the near term, mortgaging the future for the near term. you won't mortgage capability for readiness now, or do you want to take more risk? those are the kinds of choices that the secretary left out of the strategic choices and management review, but i think the point of an event like this is to raise that awareness.

on the industrial base, i think there is no doubt, i think there is a perception problem that the industrial base is relatively well on the large-cap side under the sequester, for a variety of reason. there are better planners at dod who saw this coming and prepared years ago. leaving that aside, the perception is that everything is fine and manageable. i worry about the medium suppliers and vendors. that is a concern here. i will give, depending on the credit, there has been a great emphasis on the industrial base review, sector by sector. it has been underway for years now. i am not sure how much has been taken up for action, and not sure how much they can do. their intent is good, but the dollars are not going to be there to take care for the long term. you pick up the third one.

>> i was going to come back to readiness, because i am glad are raising it, but i also would like to put in a word in defense of the traditional notion of keeping readiness high. have a lieutenant colonel who, if the marine corps needed him, you are looking as fit and trim as ever, and you could be a great war fighter. if you miss a rotation of reserve duty, it is a big deal. sometimes we get into this idea that a lot of our military is working so hard, give them a break, let them rest. the army was trying to do that for much of the last decade. they realized this focus of being readied all the time was less important than letting people just see their families and take care of their mental health. it sounded touchy-feely at first, but the army was right.

however, you would be quick to understand this better than i, frank, let's remember the recent recruit, the 20-year-old who has never properly trained up to the standards that we have think ever since tom cruise in "top gun" taught us in peacetime training that never had that standard. now they are being told you can't go shoot ammunition. we still have life ammunition for your rifle, that is good news, and you can read any books at your base that you want, but the exercises were you drive down the road to the neighboring base where there is an area for a small maneuver, we do not necessarily have all the resources for that, and we do not have the resources to fly you to one of the national training centers to do the large unit maneuver warfare training that historically has been what has made the marine corps and the army so darned good.

we do not have that kind of money right now, because you will cut $52 billion out of the physical 2014 budget. you will have to take a lot of it out of readiness. the debate which is important, and we would agree over the longer term you have to wrestle with that. in the short term you take it out of readiness and out of new contracts for industry. those are where you can go for money in the short term. now you have your 20-year-old recruit who is potentially up for call for korea or somewhere else who has never in his or her life done a proper large unit maneuver training exercise. i think that -- it will not take us back to the hollow force of the post-vietnam era, but it is a little bit of a risky decision and potentially very unfair to that recruit.

>> thank you, mike. thank you all. i want to conclude with sort of a small little war game. we are not a war game involving military strategy, and that involves the south china sea, a relationship with vietnam, a relationship with the philippines, with taiwan, and, of course, with china. now, as all of the military people are thinking through how many planes, how many tanks, this and that, there are things happening right now in the south china sea. ise people regard what happening as threatening. some things that are threatening on the near horizon, others push it way back, 15, 20 years. the people who were in vietnam see it as an immediate danger. samee in the philippines, way. taiwan, same way. the chinese are doing things that you could argue all great powers do. and china is now a great power. it has to be regarded as such.

intelligentlyond within the constraints that you both have articulated so well, i think, when you see a problem like the south china sea, does that mean you have to send more ships there, more planes they are, does it require a different kind of nonmilitary diplomacy? when the secretary of defense goes to vietnam and says we are developing a commitment, you and i, that is a loaded word within the context of the u.s.- vietnamese relationship. when the u.s. begins to talk about commit to the defense of vietnam, against whom? obviously, china. vietnam and china have fought each other many times over a thousand years. what is the smart thing right now, taking this military review into account for the u.s. to do? and i will start with mike. directedart thing is nice that our strategy has been

working. for all the ways that we have to stay vigilant toward the rise of china, and towards the real enemy, which is north korea, overall approach we have had has been successful. we have been present, have strong alliances. pointis growing to the where it is not going to be an unrivaled kind of american superiority, but the last thing we want to do is accelerate the pace of transition. and this is not necessarily -- to china being equal to the united states in the asia- pacific militarily. there may be a day, although we have great allies and experience in our armed forces and that will be a long ways off before they get to that point. i do not think we want to accelerate the perception of american relative decline. i'm not sure that "decline" is the right word to use, and i would prefer to avoid creating that impression. and therefore i do not want to

see sequestration because it will undo the rebalancing. one more point that your question raises, and i will try to make this brief, but some people say if we cut the military, at least we will not have the temptation to go fight as much. if the japanese want to fight over the islands against the chinese, let them do it. we are better off staying out, and if we have a smaller military, we will be disinclined to get involved. i do not want to fight the chinese over the islands, but leave that aside, if you look at when we fight and when we do not, i do not see a correlation between higher defense budgets and greater likelihood of intervening. the world wars began when we were unprepared. the korean war again when we were unprepared. the vietnam war was little more complex, and you know that case well, but if we fast-forward to the reagan years, in many years the reagan years are still -- people can correct me if they wish afterwards or whatever -- but the reagan years are still seen as the golden years of american defense policy, because we built up the budget did not really use the

military. isn't that a wonderful outcome? it is not all ronald reagan's great judgment that led to that, that there was no correlation between increasing the budget and increasing the proclivity to intervene militarily. in the 1990's, for operations are supported, we cut the budget and increased the number of overseas activities, and george w. bush did not run for president -- if you go back to his campaign, he did not run promising a big defense buildup and he was not intending to make foreign policy the centerpiece of his policy, and he ended up making the most fraught decision about the war in iraq. i do not think cutting our military will be the best way to keep us out of trouble in the south china sea. i want steadiness and resolve and let's sustain the rebalance. that means we can make modest cuts in defense.

>> amen. i feel like i should applaud. i think that was very powerful on michael's part. i would not put all my eggs in one basket. i want peace through strength or a modern-day version of it because i want a military that deters. i want other things, too. i want strong allies, our partners' capacity to be robust enough to defend themselves if needed and take care of their neighborhoods, so to speak. i want all of our tools of soft power to be effective, partly through the reinforcement from our hard power. i want a lot of things. i want economic strength, etc. but the pointy edge is to have this tremendously capable military that just gets into their mind a little bit, right? >> is their mind the potential

adversary? >> friends and potential adversaries. >> friends as well? >> that is what we call shaping and influencing, but we see every day with our own kids. as a parent, you want to be the one shaping and influencing your kids, but then they go to school everyday and somebody else is telling them something. but you always wanted to be a calculus. and like i said, it is not just the defense part. i want to be strong and being strong. i would second everything michael said and say where we are not heading, which is a depressing way to end this. >> i want thank you. you are both terrific and a very important, interesting rich kind of discussion of a very

competent at problem. and i know that i speak for everybody at brookings in saying thank you all for coming, and thank you all for being with us. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> we will hear from the head -- the former head of the cia and the nsa. he met with officials from the energy energy -- energy industry to talk about protecting the electrical grid. and consolidating school districts. an education secretary arne duncan talks about the global

hesitations summit here in washington, d.c. a look at the president and first lady. they were heading to orlando, florida to meet with the disabled veterans association. they would talk about job training. they are stopping in orlando on their way to martha's vineyard where they have vacationed a before.f times there will be no official -- appearance is what he is on vacation. he will be returning to washington august 18. he vacationed at the vineyard before, 2009, 2010, and 2011. this time, staying in a new location near public roads, so the road will be closed. later tonight, remarks by state

davis ineend -- wendy texas as well at her filibuster as a texas -- of a texas abortion bill. >> many of you heard my name for the first time last month when, as allison said, in the last hours of the texas legislative session, the partisans and power attempted to pass not just an abortion bill, but a bill that would block health care access to tens of thousands of women across the state of texas. in the process, these partisan lawmakers were seeking to rob texas women of their voice. because when women showed up at to testify, and they showed up by the thousands, many of them were turned away. and they were unable to give voice to an issue that had a very real impact on their lives. fo